Gold and Silver Pullback Before US Jobs Data – But Brexit Weighs on Fed

Gold and Silver Pullback Before US Jobs Data – But Brexit Weighs on Fed

Gold bullion slipped $15 per ounce from yesterday’s new 3-year highs at $1375 in London trade Thursday morning, dropping as European stock markets rallied despite the UK’s continued paralysis over starting Brexit negotiations with the remaining European Union.

Average UK house prices rose 8.4% per year in June to new record highs, said the Halifax mortgage lender today – the slowest pace since last summer.

Seven commercial property investment funds have now shut the door to clients selling following the Brexit vote, with another charging a 17% redemption fee.

A vote to Leave by the UK would pose “significant” risks to growth across the 19-nation Eurozone, the European Central Bank policy team agreed at their start-June meeting, notes released today showed.

“I am beginning to think the gold rally is running out of steam and may be due for a pullback,” says a note from David Govett at brokers Marex Spectron in London.

“We need some fresh impetus to continue higher…Unless more dire news comes out of the UK or elsewhere, I suspect there may be some profit taking ahead of the weekend.”

“The yellow metal continues to feed off global uncertainty,” agreed the Asian dealing team at Swiss bullion refining and finance group MKS overnight.

“However the focus now shifts to Friday’s [US jobs] NFP print for an indication as to whether May’s 38,000 result was just an aberration or a sign of cracks starting to appear in the US recovery.”

The worst monthly US jobs data in 6 years, the release of May’s first Non-Farm Payrolls estimate saw Dollar gold prices jump 2% as traders scaled back their bets that the US Federal Reserve would raise interest rates.

Betting on US interest-rate futures ahead of the Fed’s July meeting in 3 weeks’ time now puts the odds of “no change” above 97%, with no chance of a raise and a small possibility of a cut.

After the giant SPDR Gold Trust (NYSEArca:GLD) reported its largest 1-day inflow of metal since May 2010 for Tuesday – the day after the US Independence Day holiday – the ETF’s reported total was cut 0.3% on Wednesday.